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Shanghai Expat Forum Index » Hot Topics Forums » Visas, Taxes, and Legalities

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underh20
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Joined: Sep 27, 2006
Posts: 12702
Location: Veggie-Free Zone

Posted: Sep 13, 2008 - 12:00 PM
Post subject: Banking & Credit

A list of all nationwide -- as opposed to regional -- banks that issue credit cards in China:

1. Bank of China;
2. China Construction Bank;
3. Agricultural Bank of China;
4. Industrial & Commercial Bank of China;
5. Bank of Communications (HSBC);
6. Hua Xia Bank (Deutsche Bank);
7. Guangdong Development Bank;
8. Shenzhen Development Bank;
9. Shanghai - Pudong Development Bank (Citibank);
10. China Merchants Bank;
11. Industrial Bank Co. (Hang Seng Bank);
12. CITIC Bank;
13. Everbright Bank; and
14. Minsheng Bank.

There are some regional banks, such as Bank of Beijing and Bank of Dongguan, that also issue credit cards and there is one nationwide bank, Postal Savings Bank, that does not. Most regional banks, though, do not issue credit cards and those that do tend to only approve applications from individuals who actually live within their banking area.

As for mortgages, almost every bank -- regional or nationwide -- will offer them.

It pays to be a clever consumer because credit card / mortgage services and terms vary widely between banks. One should not make the mistake of assuming that all banks offer similar products and, thus, similar terms and conditions.

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underh20
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Posts: 12702
Location: Veggie-Free Zone

Posted: Sep 13, 2008 - 01:30 PM

China does have a credit reporting system run by the People's Bank of China. Individual banks such as ICBC have developed their own credit scoring system. Unfortunately secured credit cards such as the Bank of China Great Wall Card do not report to the PBOC.

[Removed Gratuitous Semi-Flame]

_________________
"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

Last edited by underh20 on Sep 14, 2008 - 08:17 PM; edited 1 time in total

Michael

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Joined: Mar 22, 2002
Posts: 6100

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Posted: Sep 14, 2008 - 11:41 AM

Thanks Underh2o for the info on china based credit cards. I am sure this is useful.

BeijingGirl

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Joined: Sep 13, 2008
Posts: 28

Status: Offline

Posted: Sep 14, 2008 - 12:17 PM

Chinese consumption is not customary credit card overdrafts Bloomberg News Agency, the United States on April 7 article "thrifty Chinese credit card are very puzzled"

28-year-old Miss Xia is a Shanghai trading company's client manager. She monthly by bank credit card spending amounted to 8,000 yuan, which accounted for her monthly wage of about 90 percent. She has never not allow credit card overdrafts, "I use the credit card is to facilitate, rather than to make ourselves into debt in my family tradition is to spend after the first deposit."

HSBC and Bank of Communications to set up a joint venture of the Bank of Credit Card Center for Logan to believe that Chinese and foreign banks must make more Chinese people are accustomed to borrow money to spend, this can in this new market in credit card earn money. China Merchants Bank official also said: "(in China) very few people use credit to borrow, which limits our capacity and profitability of credit card issuers. Want people to borrowing habits of consumption, so that we can make to unpaid arrears Interest. McKinsey consulting firm Shanghai Branch partner Wang Yi (Music) said: "In the past two years, the number of credit cards issued in China increased by 13 times, reaching 40 million. Only two percent of credit card users often borrowing, while the United States the ratio was 56%. "

China's economy tradition goes back more than 2,000 years ago, Confucius once said, diligence and thrift, the future will suffer. Today, thanks to bear the medical, retirement and other pressures, Chinese consumers do not want to consumption. The end of 2004, China's household savings to GDP of 16 percent, while the United States this ratio was only 3.5 percent, U.S. consumer spending is usually more than the amount of income.

Nevertheless, the McKinsey report showed that China's income from the credit card market of 500 million U.S. dollars last year, growth in 2010 to 50 billion dollars. Bank Credit Card Center is the implementation of promotional measures to encourage customers to borrow. Citigroup and partner Shanghai Pudong Development Bank were branded credit card business has spread to 10 cities…… with the habits of cardholders with card loans, 10 years, the profitability of credit card will be increased significantly. British Standard Life Investments in Hong Kong branch company, a fund manager Brian Yipu said: "It is obvious that China is a huge market, but will take a very long time to develop. The Chinese people's habit of borrowing is still very conservative."

Encourage people to use credit card lending in Asia, a number of other localities, which counterproductive. Because of lower tax rates and credit monitoring mechanism is imperfect, many Korean consumers crazy overdrafts and arrears to pay debts. Morgan Stanley's chief Asia economist Andy Xie said that China eventually will face the same risks. Have experienced poverty in the older generation of consumers may not be by credit card lending, but banks may be among young people to succeed, "the banks through the 1980s to the generation born in the issue of credit cards to obtain success. This generation does not want their income , But I hope to spend money. But they will pay debts in arrears. "

http://forum.china.com.cn/viewthread.php?tid=691&extra=page%3d468&agMo de=1&com.trs.idm.gSessionId=BC606CE08030057CB38DA23BD24F9AF9

underh20
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Location: Veggie-Free Zone

Posted: Sep 14, 2008 - 07:06 PM

I'm glad you pointed out differences in spending patterns between Chinese people and many people in Western nations.

There are two very common misconceptions, though. While nowhere as high than in, say, the US, the percentage of Chinese credit card users that carry a balance from month to month is far, far higher than 2% and projected to increase.

For their part, Chinese credit card issuing banks are trying to overcome the main barriers to increased credit card consumption. One of these, interest, is a difficult nut to crack since the interest rates are tightly controlled by the People's Bank of China. Still, Chinese banks have found a method to effectively reduce the interest rate to 6% -- lower, many say, than the actual inflation rate.

The second misconception is that the majority of credit card users carry a balance from month to month. This is false. The actual rate is much, much lower. I do have the actual data and when I get around to it I might look for it and post it.

There are far more than the 40 million credit cards in circulation. ICBC alone, the largest credit card issuer on the Mainland, has more than 8 million credit card customers followed by China Merchants Bank.

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Last edited by underh20 on Sep 14, 2008 - 08:33 PM; edited 1 time in total

underh20
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Posted: Sep 14, 2008 - 08:32 PM

One thing that's important for me, at least, is the ability to use a bank's online banking system to manage credit card account data, account payments and administrative tasks like VbV or MasterCard Secure Code registration. I much prefer using online banking in English.

One of the best credit card issuing banks in terms of online banking function in English is ICBC. Not only is their online banking service extremely robust, but it is also reliable. You can use it to repay your credit card debt and even exchange RMB into US$ in order to repay, in realtime, any foreign currency credit card debt. No other bank on the Mainland offers that service -- even in Chinese.

Shanghai - Pudong Development Bank has an English version of their online credit card banking service, but it is basically only for checking account information and cannot be used for transfers or account repayment.

Bank of China recently launched a nationwide online banking service in English, but it is a major PITA. You must use their randon password generator security device and the online banking service is not at all robust. You can do nothing beyond simple account transfers to your credit card in RMB. Further, even though Bank of China issues a foreign currency credit card (The Great Wall Card), that card cannot be linked to BOC's online banking.

Hua Xia Bank supposedly has an English version of their credit card online banking, but it is constantly broken and access is all but impossible. In any event, even if it did work, it is even less useful than PuFa's.

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"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

robnot
LoopKicker

Joined: Aug 21, 2006
Posts: 828

Posted: Sep 25, 2008 - 10:53 AM

I have an ICBC account and am generally pleased with the online banking though like many Chinese websites is "noisy", overcrowded and confusing. Am especially pleased at how transfers happen in real time... (why can't foreign banks work like that!?)

Anyway my question is can I get a credit card from them? When I applied for the account they said no but this being China rules change all the time... I do not have residency here if that makes a difference.

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underh20
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Location: Veggie-Free Zone

Posted: Sep 25, 2008 - 06:12 PM

robnot wrote:

ICBC is probably one of the least expat friendly banks in terms of credit card products. If you are not here on a work permit / residence permit, it is all but impossible.

What you can do is get a secured credit card from them. They don't do this as much as they used to, but you can find a friendly branch and tell them you can deposit an amount equal to your target credit limit in a long term deposit as guaranty. They should accept and issue you a credit card.

They will report the history of this card to the People's Bank of China credit reporting agency and after a while you will have -- hopefully -- a good credit record. You can then ask ICBC to return the security deposit to you thus making your card a normal (i.e. non-secured) credit card.

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"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

robnot
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Joined: Aug 21, 2006
Posts: 828

Posted: Oct 03, 2008 - 01:36 PM

Thanks underh20, as usual you are full of useful information.

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yearningf

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Joined: Jan 18, 2008
Posts: 9
Location: jiangyin city, jiangsu
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Posted: Nov 14, 2008 - 03:23 PM

they wont issue credit cards to foreigners unless i have 500K savings. this is with Pudong Bank, not sure with BOC though.

underh20
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Posts: 12702
Location: Veggie-Free Zone

Posted: Nov 14, 2008 - 05:49 PM

yearningf wrote:

they wont issue credit cards to foreigners unless i have 500K savings. this is with Pudong Bank, not sure with BOC though.

Why would you expect they'd give you a credit card? Do you own real estate? Work in a Fortune 500 company? Have an extensive credit record as listed in the People's Bank credit reporting agency?

If the answer to these questions is no, then you are just another subprime accident waiting for a place to happen -- in the bank's eyes.

Try BOC. They will probably issue you a card with a 10k RMB limit if you place an equal amount in a long-term guarantee deposit.

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"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

underh20
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Posts: 12702
Location: Veggie-Free Zone

Posted: Nov 23, 2008 - 01:08 PM

Is it difficult for an expat to obtain an unsecured credit card from a Chinese bank? Generally, yes. Very.

Is it discrimination? The answer is murky.

Just like in, say, the USA, there is a legitimate risk issue that banks are obligated to consider. Some factors that mitigate that risk are:

1. Credit history;
2. Property ownership;
3. Own your own car;
4. Ties to the local community;
5. Ability to repay the amount borrowed;
6. Cosigner;
7. ... and others.

The vast majority of expats have no established credit history which can be verified in the People's Bank credit reporting system. This leaves the expat applicant at a serious disadvantage.

The vast majority of expats also do not own property or cars. With no established credit history, this can be fatal when the bank is evaluating your application.

In the bank's eyes, ties to the local community means you have a long-term presence and roots in the community. Having that and a decent, stable job will sometimes result in approval for local residents, especially college students. Unfortunately few expats are in this target group.

Most expats would probably have the ability to repay their debt, but even for local people this alone is seldom sufficient.

In the past banks did allow -- and often even insisted on -- cosigners. Now they generally do not allow cosigners even for Chinese applicants.

Probably the best method an expat could use is to obtain a secured credit card. Make sure the history is reported to the People's Bank and after a couple of years request a refund of your security deposit. A year or two after that, apply for another credit card based on your good credit record.

_________________
"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

underh20
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Posts: 12702
Location: Veggie-Free Zone

Posted: Dec 12, 2008 - 08:56 PM
Post subject: Exchanging US$ ---> RMB ---> US$

We all know that when you exchange, say, US$ for RMB that you can often take the unused RMB and exchange it back into US$ on the strength of the original currency exchange receipt. Well, when it comes to US$ obtained from an incoming wire transfer (TT), you need to be very careful or when you exchange those US$ into RMB you are pretty much stuck with those RMB for life if your idea was to use whatever RMB you didn’t need back into US$ using only the original currency exchange memo.

US$ cash in hand (i.e. banknotes) is considered “cash” [钞] and cash can be converted to RMB and then back again to US$ using the original exchange receipt.

US$ obtained as the result of a TT or the deposit of a US$ check is not considered cash. It is considered “forex” [汇] and if you are not careful when you exchange that forex to RMB you will have problems repatriating any unused money.

The reason is, basically, because of the disparity between the exchange rate between US$ cash to RMB and the US$ forex to RMB. Let’s say that the US$ / RMB exchange rate is 1:7. You can give $1 cash to the bank teller and they will give you 7 RMB. When you want to later get US$ back for your RMB you give the bank, say, 7.5 RMB and they will give you $1. Let’s call this 0.50 RMB the “spread” or the bank’s profit on the transaction. However, when you give the bank $1 in forex, the bank gives you pretty close to if not exactly 7.5 RMB, but they give you no currency exchange receipt because they do not allow you change the resulting RMB back to US$ without them having earned their spread.

The only way to get around this is by first exchanging your US$ forex for US$ cash, taking the US$ cash and then using that to buy RMB. Unfortunately, when you take the proceeds of a TT or foreign currency check deposit in foreign currency cash the bank does not like that and they will charge you an approximately 1% commission on the currency you withdraw.

This whole forex vs. cash distinction is supposedly going to be eliminated by the People’s Bank , but it not happening very quickly.

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"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

gng

Newbie

Joined: Aug 22, 2008
Posts: 5

Status: Offline

Posted: Feb 03, 2009 - 06:05 PM

Hi All,

I am new to Shanghai and have been getting a lot of useful info from this forum. So, thanks for keeping this going.

Now, I am having trouble getting to the bank of america and citibank websites. The problem is so persistent that it almost seems like these websites are blocked. I am able to open all other types of websites but not these two. I have been trying for the last few days.

Any thoughts? Are these really blocked or is it a problem with my new company computer?

Thanks.

P.S. Moderator: If this is not the right thread for this post, please feel free to move it.

underh20
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Posts: 12702
Location: Veggie-Free Zone

Posted: Feb 03, 2009 - 06:27 PM

gng wrote:

What are the URLs?

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"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan

gng

Newbie

Joined: Aug 22, 2008
Posts: 5

Status: Offline

Posted: Feb 03, 2009 - 06:41 PM

underh20 wrote:

gng wrote:

What are the URLs?

I have tried these...
http://www.citibank.com/
http://www.citi.com/
https://www.citicards.com/
https//www.bankofamerica.com/

For Citi, there are URLs for each country... the only one I was able to get through is their China website (www.citibank.com.cn). Everything else fails.

seanryan471

Reacher

Joined: Aug 08, 2008
Posts: 307

Status: Offline

Posted: Feb 03, 2009 - 06:42 PM

The BoA website is not blocked. The URL is http://www.bankofamercia.com. I use it every single day.

I don't know about citibank, but I would pretty surprised if it were blocked.

I would contact their IT department in customer support and have them check your settings.

seanryan471

Reacher

Joined: Aug 08, 2008
Posts: 307

Status: Offline

Posted: Feb 03, 2009 - 06:45 PM

There should be no "s" (i.e. http not https) for the BoA website at least.

underh20
Board Legend

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Posts: 12702
Location: Veggie-Free Zone

Posted: Feb 03, 2009 - 07:06 PM

gng wrote:

underh20 wrote:

gng wrote:

What are the URLs?

These all work for me:

http://www.citibank.com/us/index.htm

http://www.citi.com/domain/index_b.htm

https://www.citicards.com/cards/wv/home.do

https://www.bankofamerica.com/index.jsp

It could be you are using a company VPN which blocks certain sites.

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gng

Newbie

Joined: Aug 22, 2008
Posts: 5

Status: Offline

Posted: Feb 03, 2009 - 07:14 PM

Seanryan471 and Underh20,

Thanks for super prompt responses. As far as it is a problem with my settings or my netwrok, I will figure it out. Just wanted to make sure that it is not something that is out of my control.

Cheers.

underh20
Board Legend

Joined: Sep 27, 2006
Posts: 12702
Location: Veggie-Free Zone

Posted: Feb 20, 2009 - 07:12 PM
Post subject: Currency Exchange: New & Unimproved

Currency Exchange: New & Unimproved

or ...

Monkey **** a Football Banking

Just had a pretty ugly fiasco today in the bank trying to exchange RMB into US$.

I want to send about $200k to my bank overseas and am short about $150k. So, figuring the $50k per year rule on purchasing foreign currency, I went to the bank taking my aiyi and my driver in tow. The idea is that each of us can buy $50k.

The good news was that the $50k per year rule is still valid. The bad news is that the implementation regulations have been recently modified to take in consideration the deteriorating balance of payment problem (i.e. financial crisis) between China and other countries (at least the US).

First of all, they said it was necessary for my two Chinese friends to have accounts in ICBC into which I could transfer enough RMB for them each to buy US$. So far, so good.

But then things started to get really shitty really fast. New rules prohibit transfers or deposits into any account of more than $5,000 per day. There are only two exceptions to this: a) you get permission from SAFE or b) you can prove you obtained the money from another bank in China. Also, in regards to transfers, you must prove a family nexus to transfer US$ from one account to another. Failing that, you have to withdraw cash and then deposit this cash into the other account.

Not wanting to leave $45k in accounts controlled by third parties and returning to the bank to transfer / withdraw $5k per day, I asked if we can just withdraw the whole $50k from each of their accounts. At least I could keep the cash under my control. No deal. Maximum cash withdrawls in US$ -- with or without appointment -- are $10k per day.

Hmmm ... ok, then I'll bring them back every day to buy $10k each.

Now, I want to buy $50k myself. They ask for my passport and I give them my green card. No deal, they say. So then I have to argue with them about the validity of this kind of ID. I finally win the battle by sending an SMS to the bank president.

Then they say that even though my ID is valid, I cannot buy more than $500 US$ per day unless I come up with a passport, residence permit and salary / tax documentation. Another battle ensues while I try to beat into their heads that a) I am not required to even own a passport and b) my ID card is the functional equivalent to a Chinese ID card according to the People's Bank. After they call a dozen people and I send another SMS ... I can buy my US$.

3 and 1/2 hours in the bank fighting with these people.

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underh20
Board Legend

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Posts: 12702
Location: Veggie-Free Zone

Posted: Feb 27, 2009 - 11:44 PM
Post subject: Financial Equivalent of a Condom

Credit Card Chargebacks 101

- or -

Why Credit Cards Are Better Than Rubbers

===============================================

I wanted to buy a few things from a rather unknown online merchant in the States that had decent prices. Because it wasn't one of the larger, more well-known merchants I was a bit hesitant, but after a rather lengthy e-mail exchange I figured the guy was pretty good / trustworthy. Besides, I have always had good luck paying by credit card.

So I paid the fucktard $2k and waited the few days that he promised it would be for him to ship my stuff. Three days passed and when I tried e-mailing him to see if he had shipped there was no response. I tried calling and got voice mail hell. Not a very good sign.

Two days later, the guy finally responds and apologizes profusely and my anxiety level drops considerably. He says he is all ready to ship and will call FedEx to pick it up the next day. The next day arrives and he calls me with a sob story. I'm pissed, but really work at restraining myself because the guy has my $2,000. Finally he agrees that he'll just refund my money to my credit card.

Three days pass and no refund, so I send him an e-mail to which there is no response. Calling him gets me voice mail hell again. My anxiety level is pretty much up to assassination levels. Finally the following evening the guy calls with another sob story. He has the money to refund me, but his mortgage payment is due. He's willing, he says, to miss his mortgage payment to do the right thing and refund my money. Perceptive as I am, I sense something is just not right and I resist the urge to verbally smack the asshole upside the head because, of course, he's got my money.

So I ask him how long it will take him to come up with another $2k if I were to agree to let him pay his mortgage. He says a week. Ok, I say, then pay your mortgage. Make sure you have a roof over your family's head and pay me next week. Of course, I'm not very happy about this, but I pretend to be because I figure I'm walking on egg shells and the guy could easily get all high fallutin and just tell me to go to hell -- without my $$$.

A week goes buy and, of course, no $$. Another two days and the guy starts this shit about he can't pay me and he hopes that some day in the very distant future he'll get the money to pay me. I'm pissed and I tell him I'll get my money out of him -- or his surviving next of kin -- one way or another. He laughs.

So I start thinking of what recourse I have. Yes, I can sue him, get a judgment and slap a lien on his West Virginia tool shed of a house. Or I can invest some more $$ and have the scumbag whacked -- a very comfortable and, I admit, attractive idea. In the end, however, I take the route that won't get me 20+ years in prison.

I call Shanghai-Pudong Development Bank and talk to my credit card department account manager. I write up a brief description of the issue, copies of my communications with the merchant to include details of the transaction and PuFa files a credit card chargeback on my behalf and I am given a provisional credit of $2k. I know from experience that it can take up to 180 days -- or more -- for the credit card chargeback process to run its course, but WTF.

45 days post chargeback, PuFa tells me the merchant has contested the chargeback and states that a) I paid him for a service and not for merchandise and that b) the purchase of merchandise was a totally different $2k deal and that he had already completed. So, I'm thinking if Craigslist is a good place to find a hitman.

I tell PuFa to go ahead and re-submit the chargeback for MasterCard arbitration and I give them additional documentation to support my claim and to refute merchant's lies. Fortunately, I use my work notebook PC and I have bullet-proof backup in full compliance with Sarbanes-Oxley. Ain't nothing that doesn't get saved and filed.

Meanwhile, the dickwad's bank has his account frozen for the full $2k in case they lose the chargeback. Since MasterCard arbitration imposes a $500 fee on the losing party, they also freeze his account for an additional $500 plus related additional fees. Late this afternoon I get a call from my account representative stating that the chargeback was accepted by the merchant's credit card processor and I have been given a permanent credit of $2,000. It appears that the merchant decided he wasn't goig to risk losing an additional $500 knowing that MasterCard almost always finds in the cardholder's favor.

Now my only concerns are how to get revenge on that piece of shit even though I have gotten my money back.

Moral of the story: If you shop anywhere -- especially online -- and you do not pay with a credit card, you are a dumb fuck and deserve to get FITA.

_________________
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Reggin

Veejay

Joined: Nov 07, 2008
Posts: 2197

Status: Offline

Posted: Feb 28, 2009 - 12:11 AM

Quote:

Now my only concerns are how to get revenge on that piece of **** even though I have gotten my money back.

Call him couple of times a week and whenevr he picks the phone just laugh and NANA NA NA NANA

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Reggin

Veejay

Joined: Nov 07, 2008
Posts: 2197

Status: Offline

Posted: Feb 28, 2009 - 12:14 AM

Quote:

After they call a dozen people and I send another SMS ... I can buy my US$.

I really really do not udnerstand they limit both sides. I usually need change US$ into RMB and every year have to use limits of everyone I know. But well - this is CHina I guess...

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